the markets are open. this is "squawk realtime." >> welcome back to our viewers joining frus the united states. this is some early market action. we are moving into the positive side of the ledger. this on the back of the strong earnings session yesterday. the european markets have been up for four of the past fooi tra -- five trading sessions. if we break down by sector, you can see where some of the

concentration has been based. seeing a little bit of negativity just out of the gates this morning, dipping by .2 of a percent. barclays has been reporting its numbers today. let's move on and take a look at some of the green we're seeing on the charts. travel and leisure moving to the upside. we've had the likes of claridge reporting today. oil and gas getting a bit of a move today. moving on to the uk market. this market was up about 1% by the close of trade yesterday. we've got a very different trading pattern this morning. we're down just about a tenth of a percent so. a negative start for the uk market. let's take a look at the early

reaction. negative reaction to the numbers that came up. this company has been focusing on changing the business model around focusing on the retail high street side of the business, away from investment banking. there's also been announcements about further probes into practices at the bank by some of the u.s. divisions, including the department of justice and the s.e.c. he's been following it. i was looking tecum net interest in business banking, world and investment banking. to me, this would seem to support it because this is where apparently barclays is focusing its attention, and yet there's no growth in this area. what are the takeaway messages here? >> the takeaway message is going to take time.

not going to be turned around over the course of two or three quarters. it does take a lot of time. takes branding, takes marketing. i think investors are maybe showing a little patience with that. obviously you heard about the department of justice and the s.e.c. about how they retain clients. that was unexpected. not sure how much of an impact that could have. but in the short term, it's going to knock some wind off the sails, so to speak. the numbers are in line, actually. they did get propped up from the investment banking side of things. but from a quarterly perspective, investors' banking income was up, but if you take away where it was, it's continuity has gone lower.

>> that's the point, isn't it. this is the first set of results as they took over from bob diamond a couple of months ago, when the investment bank is the business that was performing, up 7%, 9.1 billion pounds. can you expect barclays to shrink the size of the business when it is the performing part out there. it's delivering returns to shareholders. >> that's the concern, right? i'm looking at the way the barclays bank is working. when you're looking at one area of business propping up a weak area of the other side of business and trying to wind down the profitable part, that's going to raise some concerns. i think it will take a long period of time. there is the statement, of course, the sentiment element, the libel scandals. we've seen the department of justice and the s.e.c. filing the investigation as well. there's always been this negative sentiment that that's where they got in trouble. they'll have to wind it down.

the real concern is how quickly can they do it. i think they can do it very qui quickly. certainly it is the investment banking side that shareholders are watching because that's really where they're propping up the bank. >> i dare say that's all those questions that we just brought up, is what'swhat's driving the prices lower today. the market is tracking a little bit higher. >> let's just break into this market open to talk a little bit for the outlook for the u.s. open. wall street should be up and running today after one of the most devastating storms in the history of the u.s. at least 44 people now reported dead. millions still without power in new york and new jersey. ron allen has the latest. >> reporter: the garden state

woke up to a devastated landscape, entire communities swamped, houses ripped from their foundations. the beach erosion caused by the rerentless surf, it rearranged the jersey shore. the famed boardwalks torn apart. this is the amusement park at seaside heights before and after the storm. governor chris christie, who toured his battered state by air, described what happened as unthinkable. >> the devastation that's happened to new jersey is beyond what's happened to anyone else, at least in the reports i've seen so far. it comes as no shock since the storm made landfall here. >> it hit just south of atlantic city, the gambling and tourist destination, leaving residents who defied the mandatory evacuation order stranded. dozens had to be rescued from shelters of last resort where the power failed. in northern new jersey, more search and rescue. after a tidal surge pushed a river over its banks. residents said the water rose

five feet in a matter of minutes. >> it was like a lake in our basement. and it filled up all wayp to our stairs. >> there was no phone lines. electricity was out and all our phones were out. we couldn't call absolutely nobody. >> reporter: across the state, 2.4 million customers, 60% of the population, have no power. the worst of it was probably right along the coast, in towns like point pleasant beach, where this morning some who chose to ride out the storm told of an unbelievable experience. >> it was almost surreal, i think. very surreal. just the power and the awe of everything going on. >> reporter: the town sits behind a huge line of sand dunes built to protect it. but last night, it was no match for the power of hurricane sandy. >> we're back then. we're back into the european trading session. we've got modest gains on the

stock 600 at this hour. james williams has joined us. he's an equity portfolio manager. nice to see you. welcome. just give us a top-down view. how do you feel about markets at the moment? >> i still think they're going to run off a bit higher at the moment. it's unusual to see markets rising against downgrades. but i think a lot of people are still looking at opportunities to get a better yield on their income, on the investments. what should people be buying? >> i think clearly you need to find things that show a rise in trend. actually from the consumer stocks doing quite well recently. we've seen recent trends where if any trade improvement is coming through, we saw that with the next figures today. we saw that with recent trading segments. >> what's your macro analysis of the cash flow of the situation for uk households at the moment?

clearly if his theory is right, we need to see good support from the macro. >> it's interesting, we look at uk householders, how much they're borrowing, how much money they've got left, how much they'll have to pay for. this year looks like it will be the best year since 2005. so growth of about 1.5%. not a very good number. the point is it's an improvement. i think inflation has helped a lot on that. and it's interesting to see how it goes next year. next year looks a little bit tougher but still looks like it will grow. but i think much will depend on what happens to inflation. >> where do you think that money is going to flow to? should we buy staples or looking at some areas of the market? >> i think we can look at all

areas. you might find that they're coming through quite strong. very strong business. driving growth, driving life like improvements and getting better margins on the back of it. those are the kind of opportunities we quite fancy. >> christmas is key for all sorts of retailers. do you have a sense of the momentum we might see going into christmas? >> i think we might see some improvement. i think in particular the insurance payments coming back from the banks are helping some consumers into christmas and i think that will be spent on christmas. so i think christmas trading might be quite good. >> is there preordering issue? i know in the u.s. it's around about june, july, there's preordering for christmas and then it tightens up as you get closer, depending on how demand is expected. do we have the same numbers in the uk?

>> i think anyone in the market would decide what to do for christmas and they've got their main products ready. but you do find sometimes the significance or opportunity to outperform expectations. >> so what would christmas ordering be like? expecting a poor christmas or will they actually ask performers as to what they're thinking earlier in the year? >> we saw quite conservative views about christmas. people were quite worried about europe. so that was holding people back. on top of that, we saw markets were very unsteady, particularly in this second quarter period. for that reason, i think people were very anxious about it. if anything, i think things have come through rather better than expected. >> a little bit more green since our last check. let's look at some of the european markets. we've got the cac in france

opening higher. this is the biggest decliner on the cac this morning. the company has been battling us. markets declining across the global sphere. we've also had some numbers saying that they recorded a loss for a share of 42 cents. also on the dividend front. stephane has been following this. stephane, good morning. >> good morning to you. the numbers for the third quarter are not very good. net loss of $709 million. we were expecting a full loss. $193 million.

below expectations and the core profit of the company was in line with expectations but it's the lowest one in three years. what's going on? of course the company is facing the crisis in europe and it's also facing the slowdown of the chinese growth. that's the main issue. the global demand for steel this year will increase by 2.1%, to compare with a forecast of 3.6% in april, to compare with a strong growth of more than 6% last year. on a positive note, the business conditions improving in year with the destocking trend. that being said, the ceo of the company believes that the business environment will remain challenging in the fourth quarter of this year. also cut his dividend pavement payment for the next year to 20 cents for share, to compare with

25 cents per share in 2012. this will save the company one billion dollars. also the company is beginning to review its capital expenditure for the next year. it's going to focus on its debt. said it is important to protect the credit rating of the company, although it was not crucial to protect the investment. down 2.8%. >> thanks very much for that, stephane. let's move on to the spanish market. the ibex up in modester the toim been diversifying overseas. the company reporting today its numbers down 47% in a nine-month period. this is one bank that easily passes stress tests in spain, but regardless, still saw a push

higher. the overall number for the banks up from 4.1% a year ago. if you look at this, spanish exposures, bad loans in spain rising at the end of june. so you are seeing a very strong spike in those numbers. the german market, the dax also moving higher today. 7,331 on the xetra dax up this morning. this on the back of trying to trim its wings. let's go to patricia. this is the airline business where many of these companies have been trimming everything possible. what else can they possibly do to make this business look

better? >> well, they'll restructure less and they seem to do that definitely quite successfully, so whatever the strike, whatever the impact on the bottom line of the strikes would definitely rationalize, always been a very cautious company, very much looking at the cost as well, so what they had to say today definitely was a wow factor and this is why they're surging almost 6% as we speak. if you look at the nine-month numbers, they are looking for a operating loss of about 445 million euros, net profit for the nine-month numbers. analysts look at a loss of 128. it seems that the analysts totally miscalculated and that's why we have such a strong pop. in turm terms of more details,

continues to be one of the driving forces of their business. they're seeing a little bit of a loss coming in. so the passenger airline for 2012. on the other hand, the overall operating profit should actually be at the triple digit million area. restructuring gives an indication that costs should not exceed 100 million euros. we saw as of late that would is hit the operating number by about 33 million. medical care down 2.4%, reporting what i would call numbers that were weaker than expected. however, the forecast has been cut to the lower end of the previous expectations and that is why it is a positive stock on the stock exchange today. >> what would we do without airlines in this modern age? 24 hours ago, standing in this exact same position. jeff, it's nice to see you back. >> thank you very much indeed

for that. yeah, we have been on the road finding out what real people think is going on in the economy. and my sense is that actually there is a bit of a trailing wind for the markets at the moment. i was at the austrian central bank, and they are prepared to underpin the european story and the threat that if you engage against the ecb, they're going to come after you with a big stick this time. do you get the sense that at least for the next three to six months, the market the prepared to buy the line? >> i think the european crisis has gone way on to the back burner. all the tools are in place to fight the crisis. it's a question of political will now and social cohesion in the face of austerity. i think the market believes t t

that. the market believes the ecb. they believe draghi. i think the rise is unfavorable political parties. >> as you continue to make the point, this issue of debt still remains stubbornly at the heart of the european crisis. >> about 6% of the loan box was written off by banks. if f you look at the japanese bank, it's about 20%. the u.s. are 12 at the moment. the europeans are still about 3.9. i think there's an awful lot of debt which has got to be addressed and written off over time. i think balance sheets are still not strong enough. i think the european crisis, while off the radar at the moment, i think it still needs to be fixed in the longer term

and we've got differential wage costs and i don't think those are being waged at all. i think it's going to be a problem which is still going to come up as a nightmare and recur for investors. >> the key is, if you're printing money, creating money, you change the dynamics of deleveraging. so we've got from a deflationary deleveraging, from a backstop that needs to be creating money, which means the deleveraging is long and drawn out. but it's not so dramatic. the omt is a dividing line between which type of deleveraging you're in. the europeans have finally got to the place -- called a beautiful deleveraging. it's a better deleveraging.

>> all that may prevent indices from charging much higher. there are individual companies that can do well in this environment. it was interesting to look at fair point group and other businesses that around the rescheduling of debts and the management of cash flow. you like these businesses? >> absolutely. i mean, i think there's great opportunity for rescheduling of debt on an individual basis. has had a great run last year, but it's about 88 pence at the moment. up 40%, 50% last year. it's an incredibly attractive investment. and should we see a pickup in terms of demand for people wanting to get involved in rescheduling their debt, and we think they will be at certain stages, this economy will see improved trading conditions. so really, great attractive opportunities. the markets themselves may rise a built, but i think through

stock selection, you can really add value. we've seen that a lot of the very high visa stocks haven't really been doing so. they've really disappointed, and it's been some of the underlying stocks through individual selection. >> that speaks to the global economy, with china slowing and so on. of course, a big impact on a global trade and mining cry prices and commodity prices. when cost co-lations come down, although i'm not sure that will last. >> i don't know, i take a different view in that i tend to think that the credit boom is led by really people getting to know stocks being high performing indices. beyond the credit, i think we

might find that individual stocks will be with us. >> i think that once again, we've got to stop for a long period of time. i'm not convinced we're a secular bear market yet. >> let's put this on hold for a second and get back to karen. >> we do have a modest increase, but i want to show you some specific stocks trading on the german market. we do know the u.s. has been sharp for two days as the coastline on the east coast has been battered by sandy. this is a snapshot across some key sectors. we do have some stronger moves out there. intel down about half a percent. this is consistent with what we're seeing across nasdaq futures this morning, suggesting that tech stocks would move to negative territory later today. as the john and jo-- johnson & n

pull back. could push investors into a more defensive slant. walmart stores, shares just a little bit negative. analysts have been trying to work out whether retail will be dented by events that have happened with sandy. alcoa stock the only one up in positive territory. jeff, let me toss it back to you. >> thank you very much indeed for that. pick out some more companies for us that you like that might do okay in this environment. >> i think as we move into autumn, people think about spending more time inside. i think this is a company which -- with the recent sky fall doing really well and there's a lot more behind it. we've got "breaking dawn ii" and

other films. "life of pi" coming through as well. i think there's more opportunity in some of these companies. we're seeing that their sales are coming through quite strongly. we see good yields, often over 4%, which is an attractive investment, and good sales coming through. >> thanks very much. thanks for coming in and seeing us. jermaine is joining us. >> it's like clock work out here this morning. we do have a very earnings driven reaction. the swift market is one of the underperformers today. in negative territory. clarion stock is changing. it's down more than 6%. a fairly sizable pullback in the swiss special chemicals maker. the company reported a larger than expected fall in its net income. carolyn has been tracking some of this reaction to the numbers. >> hey there, karen. we knew that the market reaction

was going to be negative. we thought it was going to be negative to the tune of 2.5%, but this is definitely more extreme than would have thought. clarion actually now limiting system of those losses. now off by only 6%. the set of numbers, it was clearly disappointing. the company missing expectations both on the top and the bottom line. net profits for the third quarter actually fell 40%. this is a specialty chemicals company. most of its units very cyclical, depend on what overall the economy is doing. the auto sector, for example. and that pain was very much visible in the third quarter. in connection with that, we've got some of the commentary which really highlights some of the weaknesses. it saw further deterioration of the global economy and the slower than expected emerging market performance couldn't offset the weak picture that we

saw in europe. but the bigger takeaway from the numbers today is the fact that the company actually lowered its full-year guidance. it now sees flat sales growth. this is really what's putting a lot of pressure on the stock. karen, back over to you. >> thank you very much. as we focus on earnings, the big news for the u.s. later today when they open up is a reaction to super storm sandy. new york being fairly hard hit with a lot of water flooding to the subways and also power outages, particularly the lower part of manhattan. we're looking for a slight increase for futures now. you can see a bit of green. we're going to leave you with a look at some of the images the last 48 hours. >> mother nature. >> i want you to cut through the red tape. i want you to cut through bureaucracy. there's no excuse for inaction

at this point. >> describe it as looking like the pictures we've seen at the end of world war ii is not overstating it. bob... oh, hey alex. just picking up some, brochures, posters copies of my acceptance speech. great! it's always good to have a backup plan, in case i get hit by a meteor. wow, your hair looks great. didn't realize they did photoshop here. hey, good call on those mugs. can't let 'em see what you're drinking. you know, i'm glad

we're both running a nice, clean race. no need to get nasty. here's your "honk if you had an affair with taylor" yard sign. looks good. [ male announcer ] fedex office. nave 50% on banners.

in europe, markets have opened higher but trading volumes remain light. shares in barclays dropping to the bottom of the ftse after earnings disappoint. the bank also revealing tubing probes into its business practices. european airlines have left the stock 600 higher. both beating expectations and impressing investors with their cost reduction plans. and the force is with disney, as it agrees to buy lucas film for $4 billion and promises a brand-new "star wars" film for

2015. >> this is "squawk realtime." markets in europe have been open for just over half an hour. we are expecting u.s. markets to go back in line later today as well. more gainers than losers. let's run through a few of them. here it is sector by sector. the three or four sectors -- three at the moment that are declining. food and beverages down by 40%. banks down by not 2%. health care just marginally lower. on the upside, the biggest gaining sector right now, the autos. construction materials up by three quarters of a percent. individual stocks, we have loads of it to report today. that's one of the reasons getting so many of these stocks.

each of these stocks is up by 6.3% or so. air france came up with revenue, operating profits up by the 27%, and also they see their profits continuing to rise. also a better than expected figure, and also more cost savings to be brought in. london petroleum is also higher by 3.4%. again, the company came out with some figures. it's a swiss and oil production company. they've increased their production forecast, having managed to produce more than expected in the third quarter as well. on the downside, earnings againer clariant worse than expected. they see an impact from these global conditions, which they are struggling to operate.

slashing back the targets for the last couple years. that send the stock down about 3.4%. barclays has concerns about the two new regulatory processes, sending stocks down by about 3.8%, driving markets lower. the clear-up has begun on the northeast coast following one of the most devastating storms in u.s. history. at least 44 now reported dead. millions are still without power in new york and new jersey. but despite the damage from sandy, wall street is preparing to open for business today. forecasting firm ihs global insight estimates the super storm could cost the u.s. up to $50 billion. campaigning for the presidential election has so far been on hold. republican mitt romney has avoided political talk at public appearances. meanwhile, obama has cancelled a

rally in ohio today, and will instead visit new jersey to assess the damage with the states governor chris christie, the president keen to be seen responding rapidly to the crisis. >> i want you to cut through red tape. i want you to cut through bureaucracy. there's no excuse for inaction at this point. i want every agency to lean forward and to make sure that we are getting the resources where they're needed as quickly as possible. >> so there you go. president obama then just responding. we talked a little bit about this in the first hour with you about how this could suit obama in the campaign. has to be a little careful how you talk about it. but obama does look cool under fire. does have the ability to take

this crisis and show that he is still presidential material. >> yeah, i think it helps obama. he looks presidential. he's in control of the crisis, assuming he remains in control. it's such a close race. it's the sort of thing that could be quite a key swing factor. romney's gone off the map. people haven't seen him on tv for a few days. and he had great momentum, and maybe that momentum is being knocked a little bit. >> the americans elected into the white house in less than a week's time. there should be a lag effect, and maybe where the numbers are bolstered by the reconstruction. so it's going to make it very challenging to get a sense of whether the unemployment rate is coming down or going up. >> that's true, and also payroll is on friday. that may work against obama possibly if it comes in line with what people think.

>> the stats say it's very challenging to get back into the white house if there's an unemployment rate above 8%. can move two, three, four bits each time on the unemployment rate. so it's possible. >> do you think those voters are that cynical, that they look at one number. >> people remain undecided and want to be convinced. there's an awful lot of people that make their mind up when they get to the polling booth. most voters aren't fickle but the swing guys probably are. >> the demonization of the

fiscal cliff is humorous. the u.s. would only run a $600 billion deficit in 2013 instead of running a $1.2 trillion annual deficit. this would create minus 3% to minus 5% gdp. that's the line from chris, who writes in. i would read you some more of these, but i know we have a ceo waiting for us. >> we do indeed. let's dive into the latest. joining us now, the cfo of novo nordisk. one of the highest stocks on the mobile exchange.

tell us about the sort of quarter that you had. >> providing almost half of our growth and doing extremely well both in europe and in u.s. so the top line growth in the ballpark of 11%, and then with significant currencies, we have reported 20% growth and we've been able to convert that 20% growth into a 40% growth in operating profit in the third quarter. so we're very pleased with what we see. >> talk to us about the environment. one of the statements for the market today is that you expect a positive sales outlook, but the environment is challenging in major markets. are you talking specifically about the economic environment, or are you talking about the challenges from some of the other generic drugs out there? >> for the market, not so much

near competition, but more looking at what is the volume growth. if we go back three or four years, been looking at volume growth in the 6%, 7% growth level, whereas currently we're only seeing 5%. prizing reforms in europe in pla places, so not so much a story of our similar competition. >> we do have an aging population, an increased likelihood of diabetes. do you think investors -- that there will be strong demand for the products?

>> we're absolutely certain there will continue to be growth. whether it's going to be in the 5% level or 7%, 8%, time will show. i think what's important for us is also that we're offering new innovative looks into the market. an improved insulin in japan. we are standing in front of a key advisory meeting in november in the u.s. >> an idea of how big a market you think you might find for the new innovations that you have coming through the pipeline right now? >> we've seen a product -- launching into the biggest markets. on the regulatory approval

process, and then how successful it will be rolling out. >> i just wanted to ask you about hover credit out there. we know they are very hefty. are you getting access to markets out there? how much doubt has there been? >> corporate credit is not really where we place -- in terms of placing our liquidity, it's more or less solely done in state bonds. so limited risk on our side. >> i just wanted to come back -- you mentioned a couple times, saying the advisory panel in the u.s. can you tell us, how do you rate this point for approval of this product early next year in the

united states? the stocks took a little bit of a hiding last year, because there's nervousness as to whether the americans will sign off. >> forecasting on an outcome of advisory committee is always tricky. last time we had a diabetes product in front of a u.s. advisory committee, we ended up with a hung jury. that led to significant uncertainty. we're not making predictions. we anticipate based on the approval of both europe and japan, they'll have an approvable product. we'll know after november 8th. >> thank you for that. the magic kingdom is using the force to buy lucas films. here are the details.

>> disney is buying lucas films for about $4 billion. acquiring the rights of the "star wars" franchise, as well as special effects studios and astro light and magic and skywalker sounds. it will release "star wars" episode 7 in 2015, the same year the acquisition will be a credence to the studio. >> we expect that this is going to be only slightly dilutive and then creative in year three. >> consumer products licensing is on part with marvel back when it bought that studio also for $4 billion back in 2009. saying it would bring in $215 million in licensing revenue. george lucas told me that he'll continue consulting to the company as he moves into semiretirement, saying that based on how disney has handled this acquisition at marvel as

well as pixar back in 2006, he's confident that disney will know thousand build the best out of its brand. >> even though we make quite a bit of money with just the licensing, when we actually make a movie, which now they're going to start doing it, really goes through the roof. >> disney says it aims to release another "star wars" film every two to three years. we'll hear more from disney when it releases its quarterly earnings a week from thursday. from disney's headquarters, i'm julia borsten. >> we've been tracking what has been a negative reaction to the numbers this morning. rose 29% to 1.73 billion pounds. a conference call has been taking place. the cfo saying that cob

contingent capital will play an important role in the future of the company and that barclays will sound off on this. produces risk in countries, especially spain. the ceo jenkins also says delivering better returns, dividends, and lowering conversation are key, and i think this is also saying that the bank is absolutely committed to the banking model because they're having questions as to just what size banking will play in the business, and this is one business that was still doing okay in today's numbers. we're going to take a quick break. many americans waking up this morning to face the damage and assess the cost of the devastation wreaked by super storm sandy. millions are still without power. president obama due to visit new jersey today with chris christie, as we head into

the break, this is what the governor has had to say about the events of the last 48 hours. >> the devastation is unprecedented. like nothing we've ever seen reported before. >> there are homes in the middle of route 35. off of their foundations. i've never seen anything like this in my life.

wall street prepares to open for business today. at least 44 reported dead, millions still without power in new york and new jersey. ron allen has filed the story. the garden state woke up to a devastated landscape. houses ripped from their foundations. the beach erosion caused by the relentless surf so profound that it rearranged the jersey shore. its famed boardwalks torn apart. this is the amusement park at seaside heights before and after store. governor chris christie described what's happened as

unthinkable. >> the devastation that's happened to new jersey is beyond what's happening to anyone else, at least in the reports that i've seen so far. that should come as no shock since the storm made landfall here. >> reporter: it hit just south of atlantic city. the gambling and tourist destination. leaving resident ls who defied e mandatory evacuation stranded. in northern new jersey, more search and rescue. after a tidal surge pushed a river over its banks. residents said the water rose five feet in a matter of minutes. >> there's like a lake in our basement. and it filled up all the way up to our stairs. >> there was no phone lines. electricity was out. all our phones were dead basically. we couldn't call absolutely nobody. >> reporter: across the state, 2.4 million customers. 60% of the population have no power. and the worst of it was probably right along the coast, in towns like point pleasant beach, where this morning, some who chose to

ride out the storm told of an unbelievable experience. >> it was almost surreal, i think. it was very surreal. just the power and the awe of everything going on. you know, it's only once in a lifetime you see something like this. >> reporter: the town sits behind a huge line of sand dunes built to protect it, but last night, it was no match for the power of hurricane sandy. >> now, of course, before the devastation of super storm sandy, the focus is on the prolonged drought in the u.s., but we have to ask, are those patents here to say? joining us now is the equity strategist at b of a merrill lynch, who joins us onset. you have a report of opportunities, relating to the drought. bank of america merrill lynch,

the climate is changing and we're going to have more extreme weather continuing. whether the climate is changing is even up for debate. but you're taking the position that we are in line, more extreme weather. >> i think you have to look at the scientific evidence. as you take a look, 1951 through to 1980, extreme weather covered something like 0.1% to 0.2% testify globe. today it covers something like 10% of the earth. if you take a look over the course of the last 331 consecutive months, the average temperature has been higher than the global average, so we're no longer talking about ngos. we're no longer talking about climate modelling. we're talking about people like nasa, showing that extreme weather is increasingly becoming part of the new normal. the new operating environment that corporates and investors are going to have to adapt to. >> why don't you begin by just telling us how you believe investors can make money to position themselves around the

extreme weather that you see recuring more often. >> one of the main adaptations that is going to come about on the back on extreme weather is increasing pressure on food security, water security, as well as energy security. demand is set to increase anywhere from 30% to 50% over the course of the next 20 years, so from a long-term perspective, we have to be looking at themes that are going to promote those things, what some people are calling the perfect storm. clearly things like water, water management, water infrastructure, water treatment are going to become increasingly key, as well as second generation biofuels. we're reaching a position now where europe, the u.s. increasingly don't want to divert food crops to fuel, so they're looking for this next generation of crop. also looking to agricultural input. these are going to be key talking about everything from fertilizers to equipment like tractors, but also things like drought resistant feed and drought resistant crops. >> is it literally buying into equities around companies that

have the best products that you mentioned? >> to some degree, yes. there are certain sectors that will benefit off the back of this. clearly the fertilizer companies. depends on your perspective. short-term perspective, clearly you'd want to be looking to play with some of the u.s. sectors. with natural gas, it becomes low cost players. agricultural equipment is going to be key. if you take a look over the course of the last 30 years, any time that farm cash receipts have increased -- >> been batting extreme weather patterns for a long time. but what also stands out to me is that they're very keen to get involved. almost more exotic instruments, that type of thing. are you seeing more of that develop? >> i think there's a lot of criticism with some of that speculation, but i think there's also more of a take-up by government as well as by

investors that they need to take a long-term perspective. how are they going to feed nine billion people by 2050? by 2030, water demand will be higher than water supply. water will be scarcer than oil. how do you provide energy in poverty. >> we're talking about the very things that people are going to come back to work and hit the button on. so where are we going see some of the most activity? >> i think from the short term, people will be focusing on the reinsurers, for instance. what sort of impact it's going to happen. >> you're seeing we won't see some of it, for instance. >> a lot of it is quite urbanized. we're talking about urban centers in new jersey, in new york. i think the short-term impact in

terms of food commodities, etc. >> we're going to wrap that up. thanks very much for coming in. chris, thanks very much for coming in. thanks for all your correspondence this morning. if you've got anything else you want to get off your chest. phillip manduca will be in as a guest host this morning, so we look forward to that. that's it for "squawk box." "worldwide exchange" up next. we'll leave you with a look at some of the images from the last 48 hours. bye-bye. >> new york city is under water. >> don't mess with mother nature. >> i want you to cut through the red tape. i want you to cut through bureaucracy. there's no excuse for inaction

at this point. >> i've never seen anything like this in my life. >> describe it as looking like the pictures at the end of world war ii is not overstating it.